TURN OFF THE WATER!

TURN OFF THE WATER!HOST Bill McDowellEditorial Director, Meatingplace

MODERATOR Lisa KeefeEditor, Meatingplace

THE ISSUE: CORPORATE WATER RISK AND STEWARDSHIPPeter SchulteResearch Associate

Non-profit (501(c)3), charitable organization established in 1987$1.9M annual operating budget (less than 20 employees)Focus Areas:- Freshwater resources/climate change- Community strategies/environmental justice- Globalization/ethical trade/corporate social responsibilityAbout the Pacific Institute

Pacific Institute: ContextPacific Institutes endgame: environmental sustainability and social equityWater issues as a prism: focus on business risks is one ray of lightManagement of water-related business risks (i.e. corporate water stewardship) will benefit society and the environment: improve the triple bottom line

Major Water Trends and ChallengesUnmet demand: Failure to meet basic human needs; Aquatic ecosystems are being degraded and destroyedThe Squeeze: Growing population and increases in agricultural and industrial water demand constrained by a static and in some places declining water supplyChanging expectations: Corporate social responsibility, greater consumer and investor interest in ethical/sustainable conductClimate change: Hydrologic cycle changing; Less snowpack, longer droughts, more intense floods, less access to water

Hydrological shiftsGroundwater depletion

Conflict over water allocations

The Water-Energy Nexus

Water-Related Business Risk

Drivers of riskInternal The industry sector / nature of water use The maturity and reach of internal practice

External Hydrologic context (i.e. water scarce?) Political context (i.e. sufficient capacity?) Economic context (i.e. developing country?) Social context (i.e. access to water/sanitation?) Environmental context (i.e. healthy ecosystems?)

Sources of riskDirect operationsSupplier operationsWatershed conditionsCompany influenceImpact on companyMotivations for Proactively Managing Water-Related RiskEnsuring license to operate in a specific location;Preventing or reacting to operational crises resulting from inadequate water availability;Gaining competitive advantage over competitorsAssuring investors and markets that business operations will continue to be profitable;Upholding corporate values and ethics.

A Framework for Action

Measure water use and wastewater discharge in direct operations and supply chainAssess surrounding watershed conditions; identify key water physical, reputational, and regulatory risksEngage key stakeholdersIntegrate water issues into strategic business planning & governanceDisclose water performance & associated risksTools for Measuring Water Performance and Assessing Risk

Water footprinting www.waterfootprint.org

Life Cycle Assessment http://lcinitiative.unep.fr/

WBCSD Global Water Tool www.wbcsd.org/web/watertool.htm

GEMI Water Sustainability Toolswww.gemi.org/water/www.gemi.org/waterplanner/

Implement internal efficiency measures for water use and wastewater discharge (e.g. water recycling?)Corporate water accounting / footprintingSupply chain engagementEngagement with water policy and management to advance sustainable water managementAdvocate sustainable practices to other businesses in same watershedEcosystem restoration

Ways to curb water-related business risksDeveloped by companies in partnership with the UN Global Compact (Launched July 2007) Conceived with recognition that:water crisis is increasingly a business issuecomprehensive sustainability strategies will be neededsound implementation can benefit business and societiescollective action will be necessaryOver 60 endorsing companies, including Coca-Cola, Levi, Unilever, Pepsi, Dow, Bayer, Cadbury, and NikeA Call-to-Action and Strategic Framework

Peter Schulte

www.pacinst.orgpschulte@pacinst.org

Relevant publications:Water Scarcity & Climate Change: Growing Risks for Businesses & Investorshttp://www.pacinst.org/reports/business_water_climate/full_report.pdfCorporate Water Accounting: http://www.pacinst.org/reports/corporate_water_accounting_analysis/corporate_water_accounting_analysis.pdfWater Disclosure 2.0:http://www.pacinst.org/reports/water_disclosure/report.pdfGuide to Business Engagement with Water Policy:http://www.pacinst.org/reports/guide_to_responsible_business_engagement.pdf

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APPLICATION

Scott HartterVice PresidentEnvironment, Health & SafetyCargill Meat SolutionsPOLL QUESTIONS: Water Management in Meat PlantsPoll Question #1: Have you been involved in a formalized ISO based management system such as ISO 9000 or ISO 14001?

Poll Question #2: Has a water supply issue limited your current or planned operations during the past 5 years? Water Management System ElementsA formalized management system (or process) has just a few key elements within the Plan-Do-Check-Act framework.An effective facility water management program can be developed keeping in mind these elements.An effective management system helps to bring all stakeholders (commercial, regulatory/compliance, and operations) together in order to align efforts.PLAN Understanding requirementsIdentify quality and quantity requirements for each major usage point in your plant and identify limitations within your water supply. This will help you to develop a plant water balance and identify potential technology improvement needs and reuse opportunities.Plant water balance depending upon your current ability to meter, a detailed water balance may be difficult to develop. Start with a simple block flow and add detail as you add metering capability.Identify other potential water supply sources and potential supply security issues (scarcity, water rights policy, municipality limitations) that may arise in the future.

DO Maintaining Operational Control with People, Processes, TechnologyDevelop a water steering team with key departmental members and give them a hammer.Training/Awareness must be an ongoing process for all employees. Some plants have over 2,000 water users to educate.SOPs ensure water usage is embedded into equipment and process operating procedures.Controls where can we use technology to automate and ensure consistent usage that meets rqrmts and eliminates discretionary use?

CHECK If you cant measure, you cant improveIdentify key usage points to install metering/monitoring.Implement an auditing program (weekend shutdown checklist and audit, leak/tag program, nozzle replacement program, etc)Establish targets, goals and key performance indicators.

ACT Where the rubber hits the road The output from the steering team will be an Opportunity List of potential water reduction projectsEat the elephant one bite at a time agree to a prioritization process to identify the top 3-5 opportunities and then ensure capital and resource needs are well developed to fully capture the value.Make it fun all good programs utilize some type of idea campaign to create engagement and a forum to ensure all employees ideas are captured.Brag about your successes and make sure your employees are recognized appropriately for accomplishments.KEYS TO SUCCESSTop Management Support The best management systems are those that the plant manager not only endorses, but is actively involved. If its important to your boss, it will be important to you.Make sure you tie water use to energy use. Water use is normally a very large operational expense. Nearly every drop of water used is either heated or chilled and pumped a number of times before it leaves your plant, and then it must be treated, adding another cost to water usage.KEYS TO SUCCESSFiltration and separation technology will continue to be an ally as we work to improve our water resource sustainability. Ensure someone in your organization stays abreast of available technology. As new products, processes, and food safety interventions are evaluated and developed, considerations should be made to implement improved technology.RESULTSCargill began setting water usage reduction goals in 2001.During this time, we have added significantly to our water demand for food safety interventions.Our meat businesses have adopted ISO 14001 as a means to identify and control significant environmental aspects and impacts (including water use) and have maintained ISO 14001 certification since 2007.Since 2001, our meat plants have improved water usage efficiency by over 15%.Cargill has 5 large beef processing plants located in areas of water scarcity, which has impacted how we look at our business and growth opportunity.

POLL QUESTION RESULTS: Water Management in Meat PlantsPoll Question #1: Have you been involved in a formalized ISO based management system such as ISO 9000 or ISO 14001?

Poll Question #2: Has a water supply issue limited your current or planned operations during the past 5 years? Bill Gill Assistant Vice President Environmental Affairs Smithfield Foods

THE SOLUTION: REDUCTION AND CONSERVATION

POLL QUESTIONSDo you produce and distribute a water usage report on a regular basis?Every quarterEvery 6 monthsOnce a yearI have never produced a report

Do you receive feedback or questions about your water usage report?YesNoSometimesI have never produced a report

The KeyWhat You Dont Measure, You Cant Manage

More Importantly

What You Dont Manage, You Cant Change

Smithfield Opportunity4 Independent Operating Companies50 + SitesOver 7 Billion Gallons Total Annual UsageFood SafetyContract SanitationA Variety of Circumstances and Costs

The ProgramISO Certified EMS at the Facility LevelWater as a Significant AspectContinuous ImprovementWeb-based Metrics SoftwareFacility Level TargetCompare, Contrast, Transfer, Recognize The True Value (Cost) of WaterCity Water Rate or Pumping CostDisinfection/TreatmentHeat It Up/Cool It DownHigh Pressure PumpingPump it OutTreat ItPay the City

The (perhaps not so) ObviousTemperature-based Flow Control for EquipmentCooling Tower RecycleReuse of Cooling WaterBrine RecyclingLeaksTurn It OffA Bit Out of the BoxPressure RegulationFinal Effluent ReuseReport in DollarsAlternative SourcesUse Existing Heat and Cold

Actual StuffFeedmill utilized spring water that was flooding basement as boiler feed water. Cut water use by 90% (700k gallons and $60k per year)

Found abandoned cooling tower at closed plant. Piped to bank of hydraulic units on single pass and saved 1 MG per year.

More Actual StuffSet up holding tank for leftover pickle during clean up. Saved 300,000 gallons of pickle and $140k per year.

Used a closed loop glycol system to replace single pass cooling water, saving 2.4 million gallons per year.

A Couple MoreAdded pressure regulator at point of entry saving 73 MG and $219k per year.

Recycled refrigeration cooling water back into plant (uninsulated) for reuse as equipment cooling water saving 12.5 MG and $160k.On a Somewhat Larger ScaleNC plant w/ up to 4 MGD GW withdrawalPermit limited on withdrawals and dischargeEssentially using the available supply even with conservation and reuse in placePartnered w/ local Authority to build 4.4 mgd regional surface water treatment plantIncreases cost, but assures supply going fwd

POLL QUESTION: RESULTSDo you produce and distribute a water usage report on a regular basis?Every quarterEvery 6 monthsOnce a yearI have never produced a report

Do you receive feedback or questions about your water usage report?YesNoSometimesI have never produced a report

QUESTIONS & ANSWERSFOR MORE INFORMATION:Peter Schulte: pschulte@pacinst.orgBill Gill: billgill@smithfieldfoods.comScott Hartter: Scott_A_Hartter@cargill.com

Barry Owings: barry.owings@vincitgroup.com Lisa Keefe: lkeefe@meatingplace.comBill McDowell: bmcdowell@meatingplace.com

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